The number of small shareholders in Samsung SDI (006400.KS), one of South Korea's three major battery makers, rose about 30% in the first half of this year. The stock was so volatile that its yearly high was more than 2.5 times its low, prompting some existing individual investors to exit. At the same time, the swings drew a wave of new investors looking to buy at the bottom.
According to Samsung SDI's semiannual report disclosed on the 18th, the company had 766,880 small shareholders as of the end of the first half. Small shareholders are defined as those owning less than 1% of total outstanding shares. That marked an increase of 173,195, or 29.2%, from 593,685 at the end of last year. The figure had been rising steadily — 360,780 at the end of the first half of 2024, 390,852 at the end of 2024 and 462,139 at the end of the first half of last year — but the increase in this year's first half was especially pronounced.
Notably, Samsung SDI was the stock that individual investors sold on a net basis the most in the first half. From the first of last month through the 18th, individual investors sold a net 91.6 billion won worth of the stock. By contrast, individual investors bought a net 53 billion won worth of rival LG Energy Solution (373220.KS) in the first half, where small shareholders rose just 7.2%, from 759,197 to 814,200.
According to the Korea Exchange, individual investors sold a net 2.0343 trillion won ($1.5 billion) worth of Samsung SDI shares from the start of the year through the end of June. Samsung SDI was the only stock in which individual net selling topped 2 trillion won during that period. Given that the company's market capitalization stood at about 37.64 trillion won based on the first-half volume-weighted average price of 467,102 won — the total transaction value divided by total trading volume — the scale of the selling was considerable.
The reason small shareholders surged even as individual investors dumped large amounts of Samsung SDI stock can be inferred from the share price moves. On a closing basis, the stock stood at 269,500 won at the end of last year, hit a yearly high of 722,000 won on April 29, and then fell to 487,000 won on June 30.
Investors who newly entered the market during the domestic stock rally that has continued since last year appear to have come to hold Samsung SDI shares by chasing the January-to-April rally and by buying in installments during the May-to-June slump, analysts said. According to Samsung Securities, as of the 14th, 48% of the 99,355 clients holding Samsung SDI shares had held them for six months or less, while 29% had held them for a year or more. By contrast, individual investors who bought Samsung SDI last year, when the stock traded between 100,000 won and 300,000 won, would have had a strong incentive to lock in profits during the volatile first half.
Still, most investors who became Samsung SDI shareholders this year are likely sitting on losses. The stock rebounded from 358,500 won at the end of last month and closed at 488,000 won on the 18th, but it remains 32.4% below its late-April high.
Analysts see strong upside for the stock, citing the likelihood of an earnings improvement in the second half. The average target price from seven brokerages that published reports on Samsung SDI this month is 671,286 won. Mirae Asset Securities, in particular, classified Samsung SDI as its top pick in the sector and set the highest target price at 1 million won.
Samsung SDI is diversifying its business portfolio toward energy storage systems (ESS) in response to a temporary slowdown in electric-vehicle demand. Analysts view the company's recent move to convert its joint venture plant with General Motors (GM) into a wholly owned facility — securing its first solely owned battery plant in North America — as a positive. "Samsung SDI's weakness, a lack of production capacity in the United States, has been resolved through the liquidation of the joint venture (JV)," said Kim Chul-joong, an analyst at Mirae Asset Securities. "Full-scale momentum for North American ESS orders has begun."
